Prior to enactment of Arbitration & Conciliation Act, 1996 (the “Act”), the arbitration in India was governed by Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act 1937 and Foreign Awards (Recognition and Enforcement) Act 1961.
In the year 1985, the United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on International Commercial Arbitration. The Model Law sought to harmonaise concepts on arbitration and conciliation of different legal systems around the world.
The UNCITRAL Model Law and Rules intended to deal with international commercial arbitration and conciliation. Those could also serve as model for legislation on domestic arbitration and conciliation. In tune with the Model Law, India had enacted Arbitration and Conciliation Act, 1996 which came into effect on 22 August 1996 repealing the previous Acts of 1937, 1940 and 1961.
In the pursuit of making India an arbitration friendly seat, the Act was amended in 2015 by the Arbitration and Conciliation (Amendment) Act, 2015 (“2015 Act”) which came into effect from 23 October 2015.
Arbitration and Conciliation (amendment) Bill, 2019 was promulgated for corrections of certain obvious errors in 2015 Amendment and to promote institutional arbitration in India. The Bill was cleared by both Lower and Upper House of Parliament and received President’s assent 9 August 2019 (“2019 Act”). Sections 1, 4 to 9, 11 to 13 and 15 of 2019 Act have come into effect from 30 August 2019 vide Gazette Notification No. S.O. 3154(E). Hence, the amended Sections 17, 23, 29A, 34, 37, 42A, 42B, 45, 50, 87 of 2015 Act have been given effect to. Notably, application of 2015 Act has been clarified to state that the same –
(a) not apply to ––
(i) arbitral proceedings commenced before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015;
(ii) court proceedings arising out of or in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015;
(b) apply only to arbitral proceedings commenced on or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 and to court proceedings arising out of or in relation to such arbitral proceedings.
Further, Section 26 of the 2015 Act has been omitted with the effect from 23 October 2015.